NEW YORK -- Chrysler Group will begin building the 2011 Jeep Grand Cherokee -- the first salvo in an effort to restore a product-starved lineup -- on May 3, CEO Sergio Marchionne said today.

Marchionne told an industry conference here that sales of the redesigned Grand Cherokee will begin in July. Chrysler plans to have 100 percent of its existing lineup refreshed or replaced by the end of 2012, as a wave of new products derived from the alliance with Fiat S.p.A. begins to gain strength.

The Grand Cherokee, assembled in Detroit, was Jeep's second-strongest U.S. seller last year, accounting for about 22 percent of the brand's volume. The company hadn't previously spelled out a schedule for the redesigned version.

Marchionne said he is pushing for “an attention to quality that is probably unprecedented in Chrysler.”

In a speech interrupted by a protester shouting about U.S. taxpayer dollars going to Chrysler, Marchionne vowed to repay the loans from the U.S. and Canadian governments. But he said the federally mandated arbitration process for rejected Chrysler dealers has slowed efforts to improve the dealer network.

He said the 50 rejected dealers that Chrysler offered to reinstate were “in locations that benefit customers but do not have an adverse effect on existing partners.” The move also will reduce the time and expense of arbitration, he said.

Marchionne also said:

• The United States should encourage compressed natural gas as an alternative fuel that easily could be integrated into the existing distribution network at a relatively low cost. Fiat is a major producer of CNG commercial vehicles in Europe.

• He has 78 direct reports globally.

• Chrysler is on track to break even on an operating basis in 2010 and currently holds more than $5 billion in cash. In addition, he said the company's breakeven point was substantially lower than most analysts estimated.

"To the extent that I'm producing cash and I keep on investing in the brand portfolio," said Marchionne, "I feel a lot more comfortable today than I did 12 months ago -- by far."